I bought a used UTV (Polaris Ranger) last week and received the title with executed assignment of title and the form for Application for Texas Certificate of Title with the seller information filled out. I believe if I submit the Application for Texas Certificate of Title I am subject to pay 6.25% sales tax on the sales price (or whatever price is specified as long as it meets the "reasonable" level). Would it be too terrible to not submit this paperwork? The UTV will be used exclusively on a hunting ranch in South-Central Texas.

Do whatever helps you sleep at night.

You can't get a Standard Presumptive Value on a UTV, so it doesn't matter what price you use. And, if it's off-highway use only, you only need to register it - you shouldn't have to pay taxes, I believe.

You only need to register it. No taxes.

OK, I had the Polaris Ranger title transferred to my name. Here is the skinny: As an ATV/UTV with "Off Highway Use Only" on the title, there is no sales tax charged on the transaction at the county tax/assessor office. There is a title transfer fee of either $28 or $33, depending on your county. You need the title filled in and signed by seller and purchaser for the assignment of title on the back and a Form 130-U Application for Texas Certificate of Title filled out and signed by seller & purchaser. I didn't put the purchase price on the 130-U and the clerk asked me what it was and filled it in. That had no bearing on sales tax. So, that was my pretty painless experience in Fort Bend County.

For the sales tax exemption, doesn't it have to be agricultural related?

If someone were to buy one who didn't have a farm or ranch or other agricultural related business, don't they still pay the usual sales tax?

From http://www.window.state.tx.us/taxinfo/taxpubs/tx98_805.pdf:

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Off-road vehicles are subject to sales tax, not motor vehicle tax. The sales and use tax statutes are found in Chapter 151 of the Texas Tax Code. The state sales and use tax rate is 6.25 percent. Off-road vehicles are also subject to applicable local sales or use taxes up to 2 percent. Dealers are responsible for collecting the state and local taxes from purchasers and remitting those taxes to the Comptroller.

The Tax Code treats street-legal and off-road vehicles differently with regard to charges for the dealer’s VIT and the documentary fee charged for the handling of registration and titling the vehicle. These taxes and fees are part of the taxable sales price of off-road vehicles. Dealers are responsible for collecting the state sales and local taxes on the VIT and documentary fees charged in connection with the sale of an off-road vehicle. The sales price does exclude the value of a trade used to reduce the selling price of a taxable vehicle, provided it is a type of property sold by the seller in the regular course of business.

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Tax Code Section 151.316 provides a sales and use tax exemption for machinery and equipment used exclusively in the production of agricultural and timber products for sale. The timber sales tax exemption applies only to machinery and equipment used exclusively in the production of timber products for sale.

Dealers may not accept in good faith a registration number/exemption certificate for a vehicle they know will not be used exclusively on a farm or ranch in the building or maintaining of roads or water facilities, or in the production of food for human consumption, grass, feed for animal life, or other agricultural products to be sold in the regular course of business. Any use of vehicles for any other purposes (such as recreational riding, hunting, wild life management, etc.) causes a loss of the exempt status, even if the vehicle is also used in the production of agricultural or timber products.

For example, a utility vehicle qualifies for the exemption if it is used exclusively on a farm to perform activities such as spraying crops, feeding cattle, building or repairing fences, but the exemption is lost if the same vehicle is also to be used for non farm production activities such as hunting or recreational riding. The purchaser is then liable for paying taxes on the vehicle if it was purchased tax free under an agricultural or timber exemption.

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[This message has been edited by eric76 (edited 11/30/2012 5:03p).]